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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Is there a statue of limitation for State of California franchise

Customer Question

Is there a statue of limitation for State of California franchise tax board to intercept a state income tax refund. I recently had my state tax intercepted due to a utility bill that they claim i failed to take off of my name although i no longer lived at that address. the original amout was $215 which i do not mind paying however the amount is now over $500 due to interest and the city of san diego treasurer were unwilling to accept payment on the original amount owed. I was not aware of this matter which took place in 2002 and we are now in 2009 and i became aware due to my state income tax being intercepted. I questioned the orginization as to why i am just now reciving this delinquent account information now since it never showed up on a credit report nor has my state income tax ever been intercepted from date of incident 2002 to present. Basically can the state intercept funds for something that took place 7 years ago?
Submitted: 8 years ago.
Category: Tax
Expert:  Ed Johnson replied 8 years ago.

Dear denyse,


The statute of limitations you are really looking for is the statute for the collection of the utility bill.


The franchise tax board has to respond to and verify a debt and initiate the offset up on receipt, similir to the same way the IRS must respond to the U.S. Trasury offset program.


From the langauge of the law (california code 12419.5):


Whenever insufficient to offset all amounts due state agencies, the amount
available shall be applied in such manner as the Controller, in his or her discretion, shall determine. If, in the discretion of the Controller, the person or entity refuses or neglects to file his or her claim within a reasonable time, the head of the state agency owing the amount shall file the claim on behalf of that person or entity.


what this means to say is, that as long as the underlyhing statute of limitations for the utiltiy bill has not ran out, then the bill can still be submitted to the offset program.


What I need to know is, what utility bill exactly this was? electric, wate, sewer, etc?